Following on from the above announcement it was announced that a similar approach is to be taken to Real Time Information (RTI) late filing penalties. This new approach runs alongside the previously announced three-day relaxation which it appears will run until April 2016.

Rather than issue late filing penalties automatically when a PAYE submission deadline is missed, HMRC intends to take a more proportionate “risk-based” approach and concentrate on the more serious defaults on a risk-assessed basis.

Late reporting penalties already apply to employers with 50 or more employees. The ‘risk-based’ approach will apply to submissions that were late from 6 March 2015 for employers with fewer than 50 employees, and 6 January 2015 for employers with 50 or more employees.

HMRC will continue to issue risk-based penalties for the tax year 2015/2016.

Employers with 50 or more employees have been subject to penalties since last October, therefore the first three months of that period is not covered by this latest announcement.

Employers can appeal electronically using the Penalties and Appeals System on HMRC Online. Employers who receive a late filing penalty notice for tax year 2014/15 quarter 4 but who filed within three days of the reporting deadline may appeal and should use reason code A as set out in the What happens if you don’t report payroll information on time guidance.